November 3rd, 2023
In this blog post we recap significant global market events, updates in the cryptocurrency landscape, and the latest news from Diamond Pigs.
Quick Take aways:
-Strong Q3 growth in the U.S. economy suggests resilience against inflation and potential for further interest rate hikes by the Federal Reserve.
-The crypto market is in a bullish phase, led by Bitcoin and speculation about a potential spot ETF.
-Diamond Pigs’ Hereford strategy continues to outperform Bitcoin, showcasing robust gains over the last quarter.
The Financial Market
The U.S. economy showed stronger-than-expected growth in Q3, with the GDP expanding by 2.6%. This positive data suggests that economic activity continues to expand, even as wages and costs rise. The robust performance could imply that the U.S. economy is resilient enough to absorb further interest rate increases from the Federal Reserve. Throughout most of this year, the Fed’s aggressive strategy to combat near four-decade-high inflation has put downward pressure on valuations for risky assets, ranging from stocks to cryptocurrencies.
While a booming U.S. economy may encourage the Federal Reserve to increase interest rates later this week on November 1st. —a typically negative development for risky assets like Bitcoin—there is a glimmer of hope. The central bank has recently hinted at slowing the pace of future rate increases, potentially providing some relief for risky assets.
The Crypto Market
Despite this backdrop of macro economic uncertainties and a vigilant Federal Reserve, Bitcoin has maintained its strength. As we enter a new trading week, it’s trading above the $34,000 mark, showcasing its resilience.
Overall, the Crypto market is showing signs of renewed enthusiasm, adding $140 billion to their total capitalization in just a week. Bitcoin leads the change, rising 14.3% and trading around $34,500, thanks to speculation about a possible spot Bitcoin ETF from BlackRock. The sudden listing and delisting of the ETF on a website led to market excitement and uncertainty. Altcoins are also surging, with Ethereum (ETH) up 11% and others like Chainlink (LINK) and Solana (SOL) posting significant gains. The Crypto Fear and Greed Index, a measure of investor sentiment, indicates high confidence at 71, up significantly from earlier in the month. This renewed confidence coincides with substantial price gains in Bitcoin and suggests that the market believes the bear phase could be coming to an end.
In the past quarter, our Bitcoin-focused ‘Hereford’ strategy has continued its strong performance, delivering a 23.7% return, notably outpacing Bitcoin’s own 17% gain over the same period. The last month has been particularly striking, as both Bitcoin and Hereford surged by over 26%. Meanwhile, our actively managed portfolios have also shown solid performance, with returns ranging between 5% and 14% over the past three months and 12.5% to 22.5% in the last month. In parallel, our Berkshire index strategy saw a comparable uptick over the last month. It’s worth mentioning that our combined BTC and ETH strategy, named ‘Gascon,’ has been gathering momentum, boasting a 12.8% gain in the last week and more than 22% in the last month. Lastly, Bitcoin’s market share has been on the rise, stabilizing at a 54% dominance this week.
The financial and crypto markets are currently navigating through uncertain terrains, but there are strong signs of resilience, especially in the crypto sector. Notably, Diamond Pigs‘ Hereford strategy has been a standout performer, solidifying the potential and strength of our investment approach.